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Pyne Gould says FY profit about $30m after asset sales

Pyne Gould, the asset management firm controlled by George Kerr, says it will return to profit this year on gains from assets sales after an impairment-driven loss in 2012.

Profit will be about $30 million in the year ending June 30, from a loss of $47.7 million a year earlier, the Auckland-based company says in a statement.

The profit gain will lift the company's book value by 31 percent to about $127 million, Mr Kerr says.

He had previously forecast profit of $10 million and says the additional $20 million is "predominantly from realised gains from non-core asset sales".

In the first half, Pyne Gould sold holdings in Heartland New Zealand and PGG Wrightson. In the second half it sold Perpetual Group, van Eyk Research and agreed to terminate Real Estate Credit management contract with Heartland.

It is awaiting regulatory approval for the sale of Perpetual.

Pyne Gould shares last traded at 26 cents, valuing the company at $56 million. The stock has fallen about 10 percent in the past year.


Comments and questions

Many of the old school loyal Canterbury investors who were high net worth families and old money lost their financial legacies over the recent history at Pyne Gould.

What you mean is PGC shareholders lost money with Marac Finance due to crazy lending and dubious debt consolidation instruments. Marac is now part of the Heartland Bank, which doing fine, and PGC as it is now is a different entity.

I think both Heartland and PGC will be good investments.

In fairness, it was Marac Finance & the GFC that lost all the money, which is where all the old school money was. PGC's recapitalisation saved Marac from a certain failure. Heartland was a direct result of the recapitalisation, which is finally proving to be a success.

Did they sell the same assets that were impaired the prior year?

George tried to outsmart PGC shareholders and ended outsmarting himself.

Must congratulate him for buying PGC shares initially at $4.50 per share, underwriting PGC at 40 cents per share and then completely selling out of Heartland at 52 cents per share!